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Introduced Version House Bill 2932 History

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WEST virginia legislature

2019 regular session

Introduced

House Bill 2932

By Delegates Barrett and Householder

[ Introduced February 8, 2019; Referred
to the Committee on Government Organization.]

 

A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §47-20-1a; to amend and reenact §47-20-2, §47-20-3, §47-20-5a, §47-20-6, and §47-20-6a of said code; to amend said code by adding thereto a new section designated §47-21-1a; to amend and reenact §47-21-2, §47-21-4, §47-21-7, §47-21-15, §47-21-20, and §47-21-28 of said code; to amend said code by adding thereto a new section designated §47-23-1a; and to amend and reenact §47-23-2, §47-23-7, §47-23-7a, §47-23-8, and §47-23-11 of said code, all relating to transferring regulation and licensing of charitable bingo, charitable raffles, and charitable raffle boards and games from the State Tax Department to the State Lottery Commission.

Be it enacted by the Legislature of West Virginia:

ARTICLE 20. CHARITABLE BINGO.


§47-20-1a. Legislative purpose.



For purposes of this article, unless specified otherwise:

(a) “Bingo” means the game wherein participants pay consideration for the use of one or more cards bearing several rows of numbers in which no two cards played in any one game contain the same sequence or pattern. When the game commences, numbers are selected by chance, one by one, and announced. The players cover or mark those numbers announced as they appear on the card or cards which they are using. The player who first announces that he or she has covered a predetermined sequence or pattern which had been preannounced for that game is, upon verification that he or she has covered the predetermined sequence or pattern, declared the winner of that game.

(b) “Bingo occasion” or “occasion” means a single gathering or session at which a series of one or more successive bingo games is conducted by a single licensee.

(c) “Charitable or public service activity or endeavor” means any bona fide activity or endeavor which directly benefits a number of people by:

(1) Assisting them to establish themselves in life as contributing members of society through education or religion; or

(2) Relieving them from disease, distress, suffering, constraint, or the effects of poverty;

(3) Increasing their comprehension of and devotion to the principles upon which this nation was founded and to the principles of good citizenship;

(4) Making them aware of or educating them about issues of public concern so long as the activity or endeavor is not aimed at influencing legislation or supporting or participating in the campaign of any candidate for public office;

(5) By lessening the burdens borne by government or voluntarily supporting, augmenting or supplementing services which government would normally render to the people;

(6) Providing or supporting nonprofit community activities for youth, senior citizens or the disabled; or

(7) Providing or supporting nonprofit cultural or artistic activities.

(d) “Charitable or public service organization” means a bona fide, not for profit, tax-exempt, benevolent, educational, philanthropic, humane, patriotic, civic, religious, fraternal, or eleemosynary incorporated or unincorporated association or organization; or a volunteer fire department, rescue unit or other similar volunteer community service organization or association; but does not include any nonprofit association or organization, whether incorporated or not, which is organized primarily for the purposes of influencing legislation or supporting or promoting the campaign of any candidate for public office.

An organization or association is tax-exempt if it is, and has received from the Internal Revenue Service a determination letter that is currently in effect stating that the organization is, exempt from federal income taxation under subsection 501(a) and described in subsection 501(c)(3), 501(c)(4), 501(c)(8), 501(c)(10), 501(c)(19) or 501(d) of the Internal Revenue Code.

(e) “Commissioner” means the State Tax Lottery Commissioner.

(f) “Concession” means any stand, booth, cart, counter or other facility, whether stationary or movable, where beverages, both alcoholic and nonalcoholic, food, snacks, cigarettes or other tobacco products, newspapers, souvenirs or any other items are sold to patrons by an individual operating the facility. Notwithstanding anything contained in §60-7-12(a)(2) of this code to the contrary, “concession” includes beverages which are regulated by and are subject to the provisions of Chapter 60 of this code: Provided, That in no case may the sale or the consumption of alcoholic beverages or nonintoxicating beer be permitted in any area where bingo is conducted.

(g) “Conduct” means to direct the actual playing of a bingo game by activities including, but not limited to, handing out bingo cards, collecting fees, drawing the numbers, announcing the numbers, posting the numbers, verifying winners and awarding prizes.

(h) “Expend net proceeds for charitable or public service purposes” means to devote the net proceeds of a bingo occasion or occasions to a qualified recipient organization or as otherwise provided by this article and approved by the commissioner pursuant to §47-20-15 of this code.

(i) “Gross proceeds” means all moneys collected or received from the conduct of bingo at all bingo occasions held by a licensee during a license period; this term shall not be considered to include any moneys collected or received from the sale of concessions at bingo occasions.

(j) “Joint bingo occasion” means a single gathering or session at which a series of one or more successive bingo games is conducted by two or more licensees.

(k) “Licensee” means any organization or association granted an annual, limited occasion or state fair bingo license pursuant to the provisions of this article.

(l) “Net proceeds” means all moneys collected or received from all the conduct of bingo at bingo occasions held by a licensee during a license period after payment of expenses authorized by §47-20-10, §47-20-13, §47-20-15, and §47-20-22 of this code; this term shall not be considered to include moneys collected or received from the sale of concessions at bingo occasions.

(m) “Person” means any individual, association, society, incorporated or unincorporated organization, firm, partnership or other nongovernmental entity or institution.

(n) “Patron” means any individual who attends a bingo occasion other than an individual who is participating in the conduct of the occasion or in the operation of any concession, whether or not the individual is charged an entrance fee or plays any bingo games.

(o) “Qualified recipient organization” means any bona fide, not for profit, tax-exempt, as defined in subdivision (d) of this section, incorporated or unincorporated association or organization which is organized and functions exclusively to directly benefit a number of people as provided in subparagraphs (1) through (7), subdivision (c) of this section. “Qualified recipient organization” includes without limitation any licensee which is organized and functions exclusively as provided in this subdivision.

(p) “Venue” means the location in which bingo occasions are held.


§47-20-3. Who may hold bingo games; application for license; licenses not transferable.

Any charitable or public service organization which has been in existence in this state two years prior to filing an application for a bingo license issued pursuant to §47-20-4 or §47-20-5 of this code may hold bingo occasions in accordance with the provisions of this article during the time it holds a valid license.

Application for a bingo license shall be made to the Tax Lottery Commissioner and shall be on a form which shall be supplied by him or her. The application shall contain the information required by §47-20-7 of this code and any other information which the commissioner considers necessary. An application shall be filed not less than 60 days before the date when the applicant intends to hold its first bingo occasion. No bingo occasion may be held until an application filed in accordance with this article has been approved by the Tax Lottery Commissioner, and the bingo license has been received: Provided, That under no circumstances may a licensee organization conduct a bingo occasion before the sixty day filing period between the filing of the application and date of the first bingo occasion has elapsed: Provided, however, That the date the application is received by the Tax Lottery Commissioner shall begin the 60 day filing period. The Tax Lottery Commissioner shall send the applicant its license within five days after approval of the bingo application. If the filing period has elapsed, and the application has not been denied by the Tax Lottery Commissioner, and the license has not been received by the applicant, the applicant may consider the application approved and begin to hold bingo occasions. The Tax Lottery Commissioner shall send a bingo license to the applicant within five days after the expiration of the filing period if the application has not been otherwise denied.

No bingo license issued pursuant to this article may be transferred.


§47-20-5a. Venue.


Any charitable or public service organization or any of its auxiliaries or other organizations otherwise affiliated with it possessing an annual or limited occasion bingo license or a super bingo license shall conduct a bingo occasion only in the county within which the organization is principally located.

Any licensee which, in good faith, finds itself unable to comply with this requirement shall apply to the Tax Lottery Commissioner for permission to conduct a bingo occasion in a location other than the county within which the organization is principally located: Provided, That the location shall be in a contiguous county, or, if not in a contiguous county, and not in the county where the licensee organization has its principal location, the location of the proposed bingo occasion may be no more than 30 air miles from the county within which the organization is principally located. The application shall be made on a form provided by the Tax Lottery Commissioner and shall include the particulars of the requested change and the reasons for the change. The application shall be filed no later than 60 days before any scheduled bingo occasion.

For purposes of this section, the principal location of a licensee is the address of the licensee shown on the licensee's West Virginia business registration certificate.


§47-20-6. License fee and exemption from taxes.


(a) A license fee shall be paid to the Tax Lottery Commissioner for annual licenses in the amount of $500, except that for volunteer or nonprofit groups who gross less than $20,000 the fee shall be $200 and for bona fide senior citizen organizations the fee is $50. A license fee shall be paid to the Tax Lottery Commissioner for a limited occasion license in the amount of $100. A license fee of $500 shall be paid to the Tax Lottery Commissioner for a state fair license as provided in §47-20-22 of this code. All revenue from said license fee shall be deposited in the special revenue account established under the authority of §11-9-2a of this code and used to support the investigatory activities provided for in said section. The license fee imposed by this section is in lieu of all other license or franchise taxes or fees of this state and no county or municipality or other political subdivision of this state is empowered to impose a license or franchise tax or fee.

(b) The gross proceeds derived from the conduct of a bingo occasion are exempt from state and local business and occupation taxes, income taxes, excise taxes and all special taxes. The licensee is exempt from payment of consumers sales and service taxes and use taxes on all purchases for use or consumption in the conduct of a bingo occasion and is exempt from collecting consumers sales taxes on any admission fees and sales of bingo cards: Provided, That the exemption provided in this subsection does not apply to state fair bingo proceeds.


§47-20-6a. Super bingo license.


Any charitable or public service organization may, upon payment of a $5,000 license fee, apply to the Tax Lottery Commissioner for issuance of an annual super bingo license. All revenue from the license fee shall be deposited in the special revenue account established under the authority of §11-9-2a of this code and used to support the investigatory activities provided for in that section. The Tax Lottery Commissioner shall promulgate legislative rules in accordance with §29A-3-1 et seq. of this code specifying those organizations which qualify as charitable or public service organizations.

A holder of a super bingo license may conduct one super bingo occasion each month during the period of the license at which up to $50,000 in prizes may be awarded, notwithstanding the $10,000 limitation on prizes specified in §47-20-10 of this code.

A charitable or public service organization that has a regular or limited occasion bingo license may apply for a super bingo license.


ARTICLE 21. CHARITABLE RAFFLES.


§47-21-1a. Legislative purpose.


The Legislature declares, effective July 1, 2019, that all regulation and licensing of charitable raffles is transferred from the State Tax Commissioner to the State Lottery Commissioner. The Lottery Commission shall file legislative rules as emergency rules, by July 1, 2019, with amendments to reflect the transfer of administration and enforcement duties to the Lottery Commission.

§47-21-2. Definitions.


For purposes of this article, unless specified otherwise:

(a) “Charitable or public service activity or endeavor” means any bona fide activity or endeavor which directly benefits a number of people by:

(1) Contributing to educational or religious purposes; or

(2) Relieving them from disease, distress, suffering, constraint or the effects of poverty; or

(3) Increasing their comprehension of and devotion to the principles upon which this nation was founded and to the principles of good citizenship; or

(4) Making them aware of or educating them about issues of public concern so long as the activity or endeavor is not aimed at supporting or participating in the campaign of any candidate for public office; or

(5) By lessening the burdens borne by government or voluntarily supporting, augmenting or supplementing services which government would normally render to the people; or

(6) Providing or supporting nonprofit community activities for youth, senior citizens or the disabled; or

(7) Providing or supporting nonprofit cultural or artistic activities; or

(8) Providing or supporting any political party executive committee.

(b) “Charitable or public service organization” means a bona fide, not for profit, tax-exempt, benevolent, educational, philanthropic, humane, patriotic, civic, religious, fraternal or eleemosynary incorporated or unincorporated association or organization; or a volunteer fire department, rescue unit or other similar volunteer community service organization or association; but does not include any nonprofit association or organization, whether incorporated or not, which is organized primarily for the purposes of influencing legislation or supporting or promoting the campaign of any single candidate for public office.

(c) “Commissioner” means the State Tax Lottery Commissioner.

(d) “Concession” means any stand, booth, cart, counter or other facility, whether stationary or movable, where beverages, both alcoholic and nonalcoholic, food, snacks, cigarettes or other tobacco products, newspapers, souvenirs or any other items are sold to patrons by an individual operating the facility. Notwithstanding anything contained in §60-71-2(a)(2) of this code to the contrary, “concession” includes beverages which are regulated by and shall be subject to the provisions of Chapter 60 of this code.

(e) “Conduct” means to direct the actual holding of a raffle by activities including, but not limited to, handing out tickets, collecting money, drawing the winning numbers or names, announcing the winning numbers or names, posting the winning numbers or names, verifying winners and awarding prizes.

(f) “Expend net proceeds for charitable or public service purposes” means to devote the net proceeds of a raffle occasion or occasions to a qualified recipient organization or as otherwise provided by this article and approved by the commissioner pursuant to §47-21-15 of this code.

(g) “Gross proceeds” means all moneys collected or received from the conduct of a raffle or raffles at all raffle occasions held by a licensee during a license period; this term shall not be deemed to include any moneys collected or received from the sale of concessions at raffle occasions.

(h) “Joint raffle occasion” means a single gathering or session at which a series of one or more successive raffles is conducted by two or more licensees.

(i) “Licensee” means any organization or association granted an annual or limited occasion license pursuant to the provisions of this article.

(j) “Net proceeds” means all moneys collected or received from the conduct of raffle or raffles at occasions held by a licensee during a license period after payment of the raffle expenses authorized by §47-21-11, §47-21-13, and §47-21-15 of this code this term shall not be deemed to include moneys collected or received from the sale of concessions at raffle occasions.

(k) “Person” means any individual, association, society, incorporated or unincorporated organization, firm, partnership or other nongovernmental entity or institution.

(l) “Patron” means any individual who attends a raffle occasion other than an individual who is participating in the conduct of the occasion or in the operation of any concession, whether or not the individual is charged an entrance fee or participates in any raffle.

(m) “Qualified recipient organization” means any bona fide, not for profit, tax-exempt, as defined in subdivision (p) of this section, incorporated or unincorporated association or organization which is organized and functions exclusively to directly benefit a number of people as provided in subparagraphs (1) through (7), subdivision (a) of this section. “Qualified recipient organization” includes, without limitation, any licensee which is organized and functions exclusively as provided in this subdivision.

(n) “Raffle” means a game involving the selling or distribution of paper tickets, not enhanced or aided by the use of any electronic or mechanical raffle ticket dispenser, raffle ticket reader or other electronic or mechanical device of whatever design or function, entitling the holder or holders to participate in a raffle game for a chance on a prize or prizes. This subsection shall not be interpreted to prevent the use of:

(1) Hand cranked or motorized drum mixers which randomly mix tickets or other indicia together for the purpose of allowing the hand drawing of a ticket or winning indicia.

(2) A cash register for handling proceeds of sales and other ordinary cash handling and record keeping functions of a raffle licensee.

(3) Accounting and recordkeeping software for the purpose of maintaining accounting and reporting records of the licensee, and the computer for running those applications, not used in the play of any game.

(o) “Raffle occasion” or “occasion” means a single gathering or session at which a series of one or more successive raffles is conducted by a single licensee.

(p) “Tax-exempt association or organization” means an association or organization which is, and has received from the “Internal Revenue Service” a determination letter that is currently in effect stating that the organization is exempt from federal income taxation under subsection 501(a) and described in subsection 501(c)(3), 501(c)(4), 501(c)(8), 501(c)(10), 501(c)(19) or 501(d) of the Internal Revenue Code of 1986, as amended; or is exempt from income taxes under subsection 527(a) of said code.


§47-21-4. Who may hold raffles; application for license; licenses not transferable.


(a) Except as provided in §47-21-3 of this code, only persons, as defined in §47-21-2 of this code, who are residents of this state and who are active members of any charitable or public service organization which has been in existence in this state for at least two years prior to filing an application for a raffle license issued pursuant to §47-21-5 or §47-21-6 of this code may hold raffle occasions in accordance with the provisions of this article during the time it holds a valid license.

(b) Application for a raffle license shall be made to the Tax Lottery Commissioner and shall be on a form supplied by him or her. The application shall contain the information required by §47-21-8 of this code and any other information which the commissioner considers necessary. No raffle may be held and no tickets may be sold pursuant to this article until the raffle application has been approved by the Tax Lottery Commissioner and the license has been received by the applicant: Provided, That no raffle occasion may be held and no raffle tickets may be sold until a sixty day filing period, which is that time period between the receipt of that application by the Tax Lottery Commissioner and the first raffle occasion, has expired: Provided, however, That the Tax Lottery Commissioner shall send the applicant its license within five days after the application is approved. If the 60 day filing period has expired and the application has not been denied and the raffle license has not been received by the applicant, the applicant may consider the application approved and begin to sell tickets for the raffle or hold the raffle occasion. The Tax Lottery Commissioner shall send the applicant its license within five days after the expiration of the filing period if the application has not been otherwise denied.

(c) For purposes of this article, any application for an annual license or a limited occasion license received prior to the effective date of this article is considered filed on the effective date.

(d) No raffle license issued pursuant to this article may be transferred.


§47-21-7. License fee and exemption from taxes.


(a) A license fee shall be paid to the Tax Lottery Commissioner for annual licenses in the amount of $500. A license fee shall be paid to the Tax Lottery Commissioner for a limited occasion license in the amount of $50. All revenue from said license fee shall be deposited in the special revenue account established under the authority of §11-9-2a of this code and used to support the investigatory activities provided for in said section. The license fee imposed by this section is in lieu of all other license or franchise taxes or fees of this state and no county or municipality or other political subdivision of this state is empowered to impose a license or franchise tax or fee on any raffle or raffle occasion.

(b) The gross proceeds derived from the conduct of a raffle occasion are exempt from state and local business and occupation taxes, income taxes, excise taxes and all special taxes. Any charitable or public service organization conducting a raffle occasion pursuant to the provisions of this article is exempt from payment of consumers sales and service taxes, use taxes and all other taxes on all purchases for use or consumption in the conduct of a raffle occasion and is exempt from collecting consumers sales taxes on any admission fees and sales of raffle tickets.


§47-21-15. Payment of reasonable expenses from proceeds; net proceeds disbursement.


(a) The reasonable, necessary and actual expenses incurred in connection with the conduct of raffle occasions, not to exceed 25 percent of the gross proceeds collected during a license period, may be paid out of the gross proceeds of the conduct of raffle, including, but not limited to:

(1) Rent paid for the use of the premises: Provided, That a copy of the rental agreement was filed with the raffle license application with any modifications to the rental agreement to be filed within 10 days of being made: Provided, however, That in no event may the rent paid for the use of any premises exceed the fair market value of rent for the premises;

(2) The cost of custodial services;

(3) The cost to the licensee organization for equipment and supplies used to conduct the raffle occasion;

(4) The cost to the licensee organization for advertising the raffle occasion;

(5) The cost of hiring security personnel, licensed pursuant to the provisions of article §30-18-1 et seq. of this code; and

(6) The cost of providing child care services to the raffle patrons: Provided, That any proceeds received from the provision of child care services shall be handled the same as raffle proceeds.

(b) The actual cost to the licensee for prizes, not to exceed the amounts as specified in §47-21-11 of this code, may be paid out of the gross proceeds of the conduct of raffle.

(c) The cost of any refreshments, souvenirs or any other item sold or otherwise provided through any concession to the patrons may not be paid for out of the gross proceeds from the raffle occasion. The licensee shall expend all net raffle proceeds and any interest earned on the net raffle proceeds for the charitable or public service purposes stated in the application within one year after the expiration of the license under which the raffle occasions were conducted. A licensee which does not qualify as a qualified recipient organization may apply to the commissioner at the time it applies for a raffle license or as provided in subsection (e) of this section for permission to apply any or all of its net proceeds to directly support a charitable or public service activity or endeavor which it sponsors.

(d) No gross proceeds from any raffle operation may be devoted or in any manner used by any licensee or qualified recipient organization for the construction, acquisition, or improvement, of real or personal property except that which is used exclusively for one or more charitable or public service purposes or as provided in subdivision (3), subsection (a) of this section.

(e) The Tax Lottery Commissioner has the authority to disapprove any contract for sale of goods or services to any charitable raffle licensee for use in or with relation to any charitable raffle operation or occasion, or any lease of real or tangible personal property to any charitable raffle licensee for use in or with relation to any charitable raffle operation or occasion, if the contract or lease is unreasonable or not representative of fair market value. Disapproved contracts or leases shall be considered to be in contravention of this article, and are void. Any attempt by any charitable raffle licensee to engage in transactions under the terms of any disapproved lease or contract is grounds for revocation or suspension of the charitable raffle license and for refusal by the Tax Lottery Commissioner to renew the charitable raffle license.

(f) Any licensee which, in good faith, finds itself unable to comply with the requirements of the subsections (a) through (e) of this section shall apply to the commissioner for permission to expend its net proceeds for one or more charitable or public service purposes other than that stated in its license application or for permission to expend its net proceeds later than the one-year time period specified in this section. The application shall be on a form furnished by the commissioner and shall include the particulars of the requested changes and the reasons for the changes. The application shall be filed no later than 60 days before the end of the one-year period specified in this section. In the case of an application to extend the time in which the net proceeds are to be expended for a charitable or public service purpose, the licensee shall file such periodic reports with the commissioner as the commissioner directs until the proceeds are expended.


§47-21-20. Violation of provisions; crime; civil penalties; additional grounds for suspension or revocation.


(a) Any person who knowingly violates any provisions of this article, other than the provisions of §47-21-18 or §47-21-19 of this code, or subsection (b) of this section, is guilty of a misdemeanor and, upon conviction thereof, shall be fined not less than $100 nor more than $1,000; and, upon a second or subsequent conviction thereof, shall be fined not less than $100 nor more than $100,000 or confined in jail not more than one year or both fined and confined.

(b) On and after July 1, 2010, any person licensed under this article, or any person who operates a raffle without a license under §47-21-3 of this code, who is in possession of any electronic or mechanical raffle ticket dispenser, raffle ticket reader or other electronic or mechanical device of whatever design or function, other than those machines and apparatus allowed under §47-21-2(n) of this code, that is used or designed to be used as part of a licensed raffle is guilty of a felony and, upon conviction thereof, shall be imprisoned in a state correctional facility for a term of not less than one year nor more than three years, and fined not less than $50,000 nor more than $100,000, for each electronic or mechanical raffle ticket dispenser, raffle ticket reader or other electronic or mechanical device of whatever design or function, other than those machines and apparatus allowed under §47-21-2(n) of this code, in the person's actual or constructive possession in this state. For a person other than an individual, upon conviction, the fine may not be less than $100,000 nor more than $500,000 for each video electronic or mechanical raffle ticket dispenser, raffle ticket reader or other electronic or mechanical device of whatever design or function in the person's actual or constructive possession in this state.

(c) A licensee may also have his or her license suspended or revoked for failure to comply with this article and may be required to forfeit the machines or devices to the Tax Lottery Commissioner for destruction.

(d) In addition to any other penalty provided by law, any person, licensed or unlicensed under this article, who violates any provisions of this article, or who fails to perform any of the duties or obligations created and imposed upon them by the provisions of this article, other than the provisions of §47-21-18 or §47-21-19 of this code, or subsection (b) of this section, is subject to a civil penalty as may be determined by the Tax Lottery Commissioner in an amount not to exceed $10,000.


§47-21-28. State fair raffle license; rules and regulations.


The West Virginia state fair board may apply annually to the Tax Lottery Commissioner for a state fair raffle license to provide for the conduct of raffle occasions at the state fair. The license shall permit the state fair board to have one or more persons conduct raffle occasions at the state fair who have conducted raffle occasions on a regular basis for a least one year prior to the date of the state fair board's application. A license fee of $500 shall be paid to the Tax Lottery Commissioner for the state fair raffle license. The provisions of §47-21-11, §47-21-12, §47-21-14, §47-21-15 or §47-21-26 of this code do not apply to a state fair raffle license. No state fair raffle license may be issued unless the application includes a copy of any lease or agreement entered into between the state fair board and the persons who are to conduct raffle occasions at the state fair. The state fair board may adopt reasonable rules and regulations, not inconsistent with or in violation of the provisions of this article, to govern the holding of raffle occasions at the state fair.


ARTICLE 23. CHARITABLE RAFFLE BOARDS AND GAMES.


§47-23-1a. Legislative Purpose.


The Legislature declares, effective July 1, 2019, that all regulation and licensing of charitable raffle boards and games is transferred from the State Tax Commissioner to the State Lottery Commissioner. The Lottery Commission shall file legislative rules as emergency rules, by July 1, 2019, with amendments to reflect the transfer of administration and enforcement duties to the Lottery Commission.

§47-23-2. Definitions.


For purposes of this article, unless specified otherwise:

(a) “Commissioner” means Tax Lottery Commissioner of the State of West Virginia, or his or her delegate.

(b) “Retail value” means the actual consideration paid to the wholesaler by the retailer for any raffle boards or games.

(c) “Person” means any individual, association, society, incorporated or unincorporated organization, firm, partnership or other nongovernmental entity or institution.

(d) “Retailer” means every person engaged in the business of making retail sales of raffle chances except a charitable or public service organization authorized to conduct raffles pursuant to §47-21-3 of this code.

(e) “Charitable raffle board” or “charitable raffle game” means: (1) A board or other device that has many folded printed slips to be pulled from the board or otherwise distributed without a board on payment of a nominal sum in an effort to obtain a slip or chance that entitles the player to a designated prize; (2) a series of paper cards with perforated break-open tabs, a face value of which is covered or otherwise hidden from view to conceal one or more numbers, letters or symbols, which, on payment of a nominal sum, entitles the player to obtain a chance to a designated prize; or (3) such other similar game which may be defined by the State Tax Lottery Commissioner by legislative rule.

(f) “Sale” means the transfer of the ownership of tangible personal property for a consideration.

(g) “Verification” means a unique manufacture identifiable serial number which is required to be printed on each ticket in a charitable raffle board or charitable raffle game or such other form of identification as may be prescribed by the Tax Lottery Commissioner upon a showing of undue hardship by the taxpayer: Provided, That such other form of identification shall be prescribed by rule in accordance with the provisions of §29A-3-1 et seq. of this code.

(h) “Wholesaler” or “distributor” means any person or entity engaged in the wholesale distribution of charitable raffle boards or games or similar boards or devices, as defined by the commissioner, and licensed under the provisions of this article, to distribute said devices to charitable raffle boards or games retailers as defined in this article. It also includes anyone who is engaged in the manufacturing, packaging, preparing or repackaging of charitable raffle boards or games for distribution in this state: Provided, That no license taxes or other fees provided for in this section may be charged to any newspaper or other printing or duplicating operation not regularly engaged in the business of manufacturing, packaging, preparing or repackaging charitable raffle boards or games where the gross sales of such printing or duplicating operation from such activity does not exceed $7,500 per calendar year and who is donating such items or services to a nonprofit entity without compensation may not be considered a “wholesaler” or “distributor” under this article.


§47-23-7. Surety bonds required; release of surety; new bond.


The commissioner may require wholesalers and distributors to file continuous surety bond in an amount to be fixed by the commissioner except that the amount shall not be less than $1,000. Upon completion of the filing of a surety bond an annual notice of renewal, only, shall be required thereafter. The surety must be authorized to engage in business within this state. The bond shall be conditioned upon faithfully complying with the provisions of this article including the filing of the returns and payment of all fees prescribed by this article.

Any surety on a bond furnished hereunder shall be released and discharged from all liability accruing on such bond after the expiration of 60 days from the date the surety shall have lodged, by certified mail, with the Tax Lottery Commissioner a written request to be discharged. This shall not relieve, release or discharge the surety from liability already accrued or which shall accrue before the expiration of the sixty-day period. Whenever any surety shall seek release as herein provided, it shall be the duty of the wholesaler or distributor to supply the commissioner with another bond.


§47-23-7a. Requirement of wholesalers and distributors to be licensed to do business in state; resident agent requirement.


(a) Any wholesaler or distributor supplying charitable raffle boards or games to retailers in this state shall be registered to do business in this state pursuant to the provisions of §11-12-1 et seq. of this code.

(b) Nonresidents otherwise complying with the provisions of this article may be licensed as wholesalers or distributors of charitable raffle boards or games upon designating to the Tax Lottery Commissioner a resident agent upon whom notices, orders or other communications issued pursuant to this article may be served and upon whom process may be served.


§47-23-8. How fee paid; reports required; due date; records to be kept; inspection of records and stocks; examination of witnesses, summons, etc.


The retail value fee imposed by §47-23-3 of this code shall be paid by each licensed wholesaler or distributor to the commissioner on or before April 20, July, October and January for the preceding three calendar months. The measure of the fee on the retail value of charitable raffle boards or games shall be determined by multiplying the total amount of the retail value of all charitable raffle boards and games sold by a wholesaler or distributor to retailers during the said three-month period by 20 percent. Said fee shall be in addition to any tax imposed pursuant to the provisions of §11-15-1 et seq. of this code. All fees due and owing to the commissioner by reason of this article, if paid after the due dates required by this section, shall be subject to the provisions of §11-10-1 et seq. of this code. Each wholesaler or distributor shall provide with each quarterly payment of fees a return covering the business transacted in the previous three calendar months and providing such other information as the commissioner may deem necessary for the ascertainment or assessment of the fee imposed by this article. Such return shall be signed under penalty of perjury on such forms as the Tax Lottery Commissioner may prescribe and the wholesaler or distributor shall at the time of filing remit all fees owed or due.

The returns prescribed herein are required, although a fee might not be due or no business transacted for the period covered by the return.

Each person required to file a return under this article shall make and keep such records as shall be prescribed by the commissioner that are necessary to substantiate the returns required by this article, including, but not limited to, invoices, serial numbers or other verification, inventories, receipts, disbursements and sales, for a period of time not less than three years.

Unless otherwise permitted, in writing, by authority of the commissioner, each delivery ticket or invoice for each purchase or sale of charitable raffle boards or games must be recorded upon a serially numbered invoice showing the name and address of the seller and the purchaser, the point of delivery, the date, quantity, serial number and price of the product sold and the fee must be set out separately, and such other reasonable information as the commissioner may require. These invoicing requirements also apply to cash sales and a person making such sales must maintain such records as may be reasonably necessary to substantiate his or her return.

In addition to the commissioner's powers set forth in §11-10-5 of this code, the commissioner shall have authority to inspect or examine the stock of charitable raffle boards and games kept in and upon the premises of any person where charitable raffle boards and games are placed, stored or sold, and he or she shall have authority to inspect or examine the records, books, papers and any equipment or records of manufacturers, wholesalers and distributors or any other person for the purpose of determining the quantity of charitable raffle boards and games acquired or disbursed to verify the truth and accuracy of any statement or return and to ascertain whether the fee imposed by this article has been properly paid.

In addition to the commissioner's powers set forth in §1-10-5 of this code, and as a further means of obtaining the records, books and papers of a manufacturer, wholesaler, distributor or any other person and ascertaining the amount of fees and returns due under this article, the commissioner shall have the power to examine witnesses under oath; and if the witness shall fail or refuse at the request of the commissioner to grant access to the books, records or papers, the commissioner shall certify the facts and names to the circuit court of the county having jurisdiction of the party and such court shall thereupon issue summons to such party to appear before the commissioner, at a place designated within the jurisdiction of such court, on a day fixed, to be continued as the occasion may require for good cause shown and give such evidence and lay open for inspection such books and papers as may be required for the purpose of ascertaining the amount of fee and returns due, if any.


§47-23-11. Administration; rulemaking; required verification.


(a) The commissioner shall propose for promulgation, rules to administer the provisions of this article in accordance with the provisions of Chapter 29A of this code: Provided, That the initial promulgation of rules to administer the provisions of this article shall be by emergency rule. Additionally, the commissioner shall promulgate a rule which requires that every charitable raffle board or game shall each bear verification, as defined by §47-23-2 of this code, printed by a manufacturer on each ticket in a game unless, upon application by the taxpayer showing undue hardship, the Tax Lottery Commissioner consents to waive this requirement in favor of some other form of verification.

(b) The commissioner shall deny an application for a license if he or she finds that the issuance thereof would be in violation of the provisions of this article.

(c) The commissioner may suspend, revoke or refuse to renew any license issued hereunder for a material failure to maintain the records or file the reports required by this article or administrative rule if the commissioner finds that said failure will substantially impair the commissioner's ability to administer the provisions of this article with regard to said licensee.

(d) The burden of proof in any administrative or court proceeding is on the applicant to show cause why a charitable raffle boards or games wholesaler's or distributor's license should be issued or renewed and on the licensee to show cause why its license should not be revoked or suspended.


 

NOTE: The purpose of this bill is to transfer the regulation and licensing of charitable bingo, charitable raffles, and charitable raffle boards and games from the State Tax Department to the State Lottery Commission.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.

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